Posta Uganda eyes mobile money transfer...

Posta Uganda, formerly a core asset of the Uganda Posts & Telecommunication Corporation is reported to be preparing to enter the mobile money transfer business. According to the East African newspaper this week, the company is likely to launch a money transfer product quite similar to that run by Safaricom in Kenya under its highly successful M-PESA brand.

Under this system, Posta Uganda clients will be able to transfer and receive funds using their mobile phones through tele-centers country wide. Posta intends to establish atleast 20 tele-centers courtesy of a US$300,000 grant from the World Bank. These innovations are a credit to Dr. Ham Mulira Mukasa, Minister for ICT under whose docket Posta Uganda falls. The formal Postal sector has been under tremendous financial stress as a result of the emergence of cheaper and faster means of mail delivery as well as stiff competition from International courier companies such as DHL and FEDEX.

Posta Uganda's entry into this hitherto unknown territory is nothing less than an act of courage. However, the company will need more than wits to survive in an industry that is mired in regulatory grey zones. It is not clear whether funds transfer of this nature will be covered under the Uganda Communication Commission's existing regulations or traditional Banking law. More specific issues for instance include whether Posta can be considered a 'deposit taking institution', a concept that might excite the Bank of Uganda(central Bank) or whether it is more aligned to the concept of a 'carrier' as known in telecoms law.

Overall, this is an important development in the increasing convergence of communication services and products in East Africa, as well as the development of innovative brands. Yours truly would be keen to know under what brand Posta Uganda intends to launch the new service!